Engaged Employees Create Happy Customers

Yesterday I was trying to locate a particular type of broadband device for my laptop. Not wanting to waste time driving around in search of the product, I called a large, well known electronics store. Jonathan took my call, and couldn’t have been more pleasant. He said he didn’t know if they had that particular product in stock, but would check while I was on hold. Nine minutes and 34 seconds later, he picked up the phone and said, “Thank you for waiting. How may I help you?” I reminded him of my request, and he said, “Sorry. I forgot. I’ll transfer your call to mobile phones.” Three minutes after the transfer, when no one answered, I gave up and hung up.

After work, I drove to the store and was helped by Nathan, who informed me that they didn’t have the device, but a nearby store might. I told him that I had tried to call that store several times during the day, but no one answered. Using their internal phone system, he called the sister store. After about five minutes of waiting, he said, “They won’t pick up my call either.” I felt better knowing that it wasn’t just me that wasn’t getting the service I expected.

I then drove to the store and asked the greeter where the product would be, if it was in stock. He directed me to the mobile phones, where I found four sales representatives deeply involved in an animated conversation, oblivious to me. Fortunately, I found just what I was looking for, hanging on a rack, no thanks to the customer service I had received throughout the day. This morning, while researching another topic, I ran across an article ranking the best and worse companies for customer service, and was not surprised to see this company was ranked in the second place for the poorest customer service.

Most companies go to great lengths to assure consumers that their commitment to service is exemplary. Commitment is important, but the actual delivery of that service is the critical moment for a company’s success. Despite all the advances in technology, which in theory, should make it easier for us to do business with a company, the actual level of customer satisfaction has not improved much during the past decade. In the mid 90s, according to The American Customer Satisfaction Index, consumer satisfaction ranked 74.8 (on a scale of 0 – 100). Today, the same index measures consumer satisfaction at 75.8. That means that at any one point in time, about one quarter of us are dissatisfied with the service we receive as customers and most likely are beginning to search for a viable competitor.

These are tough times for most businesses. Many, to stay viable, have cut back on the number of customer service representatives they hire. I don’t need to provide research to substantiate this fact. Each time you go into a store, and can’t find anyone to help you, you experience this reality. Yet, recent research shows us that taking just the opposite approach is actually the more profitable approach. In 2006, Claes Fornell, a professor at the Ross School of Business at the University of Michigan along with other colleagues, published their findings in a classic customer service study. Their research documented that companies with high customer satisfaction ratings were not only more profitable, but also had stronger stock market performance. The most successful companies in their study considered customer service a bottom line metric.

One of the most successful companies in Fornell’s study was American Express. When the study was conducted, AMEX was implementing an internal program that involved training and incentivizing its staff to become more engaging with customers. AMEX got rid of the traditional scripts and allowed the customer service representatives to determine how long to stay on each call. Incentives were tied to customer satisfaction and feedback, not number of calls handled. During the time of the study, AMEX customers increased spending , and both levels of customer service satisfaction and profitability were up.

A recent study by Kenexa found that companies that had high levels of employee engagement reported five times higher total shareholder return over five years, when compared to companies with low levels of employee engagement. Another study by Towers Watson linked high levels of employee engagement to a 5-6% higher net profit margin. The research is conclusive. Engaged, highly satisfied employees increase levels of customer satisfaction and drive bottom line profitability. In the words of Jack Welch, former CEO of GE, “Any company trying to compete, must figure out a way to engage the mind of nearly every employee.”

Companies such as Zappos, Trader Joes, and Southwest Airlines, understand that to attract and retain engaged customers, they must first develop an engaged workforce. These companies believe deeply in the measurable correlation between employee engagement, customer engagement and profitability. As such, they are committed to:

Hiring the Right People: Not everyone is cut out for a service job. Some people are customer service repellent. No amount of training will change their attitude. Hire the right people to serve your customers. You want happy, pleasant people who delight your customers by sharing their positive energy and talent when they’re serving them.

Providing Training and Support: To fully maximize your employees’ expertise, give them the tools and training they need to masterfully deliver your products and service, wowing your customers. Take no shortcuts when it comes to investing in thoroughly training your employees and then providing all the tools, resources and support they need to be successful. They are the face and voice of your company.

Giving Employees Autonomy: Companies that excel at providing extraordinary service hire and train the right people, and then get out of the way to let them do their jobs to the best of their ability. Leaders in these companies have confidence in their employees’ abilities for effectively resolving customer concerns. Employees are empowered to take whatever action is needed to ensure high levels of customer satisfaction.

Connecting the Dots: When employees understand how their individual contributions bolsters the overall success of the company, they are more likely to demonstrate their loyalty by going above and beyond. Routinely communicate how their part in helping customers helps the overall organization achieve success.

Providing Recognition: Providing great service, day after day, difficult customer after difficult customer, is not easy. To keep employee morale and levels of engagement high, routinely look for opportunities to pass on kudos from customers and genuinely recognize the important contributions your customer service heroes are making to your bottom line.

You can’t expect to engage and retain your customers if you don’t first create an engaged workforce. Take good care of your employees, and they, in turn, will take good care of your bottom line.

The Manager's Toolkit

The Manager's Toolkit is the one stop action planning website for becoming an even stronger, more effective leader. Managers will read recommendations, related articles, suggested actions, and watch informative videos that will guide them through improving their leadership skills.